Jacksonville was just .02 points from escaping the red-shaded real estate investment ranks of “generally poor” to reach the yellow-tinged tones of “fair.”
“At 4.5, it would be a yellow,” said Dean Schwanke, executive director for the Urban Land Institute Center for Capital Markets and Real Estate and ULI senior vice president in Washington, D.C.
Jacksonville scored 4.48 on a scale of 1-9, low to high, for its attractiveness for real estate investors.
Among the 51 markets scored, Jacksonville ranked No. 40. Washington, D.C., was No. 1 and Detroit, Mich., was No. 51.
Among market areas with under 2 million in population, Jacksonville ranked No. 11. Austin, Texas, was No. 1 in the category for population and No. 2 overall. Las Vegas was last, at No. 18, in the category and No. 49 overall.
Still, Schwanke said Jacksonville’s investment prospects are showing some signs of improvement.
Schwanke was the guest speaker to almost 180 members and visitors at the ULI North Florida “Emerging Trends in Real Estate 2012” program Wednesday evening at the Hyatt Downtown.
The investment rankings were reported in the “Emerging Trends in Real Estate” report from ULI and PwC, the brand name of member firms of Pricewaterhouse Coopers.
The 2011 report was called “The Era of Less.” The 2012 edition is “Facing a Long Grind.”
ULI Chairman Peter Rummell, principal of Rummell Co. LLC in Jacksonville and a 42-year veteran of the real estate industry, moderated a panel discussion about industry trends.
Panelists were Jerry Mallot, president of the JAXUSA Partnership of the JAX Chamber; Charles Carlisle, CEO and principal of Bristol Development Group in Franklin, Tenn.; and Eric Zimmermann, managing director of Eastdil’s Atlanta office.
The ULI report summarized that U.S. real estate players in 2012 “must resign themselves to a slowing, grind-it-out recovery.”
ULI said that among the sectors of interest to investors looking for strong properties to buy, “only apartments will score especially well” while “demographic trends and the aftermath of the housing bloodbath combine to increase and sustain demand for multifamily units.”
Jacksonville isn’t singled out often in the report, but under a summary of “Other Market Prospects” the report says: “Orlando, Tampa and Jacksonville struggle to decouple from Florida’s housing woes.”
Rummell, also chairman of the Jacksonville Civic Council, is chairman of ULI globally.
“I think we’re part way through it,” he said of the real estate recession.
“I’ve been in this theater before, but this movie is different,” he said. “This is a very long movie.”
Rummell said he is guarded about the next few years in real estate, except for apartments.
“The era of a rising tide lifting all ships is gone,” he said.
Among the panelists’ remarks:
Carlisle: “The apartment business does have a lot going for it,” he said. Regarding the state of the real estate investment industry, “what’s different now is we’re in a debt crisis and we’re going through a long deleveraging. You don’t recover quickly.” He is “very optimistic long-term,” while “the next few years are going to be difficult.”
Mallot: Jobs are being created in Northeast Florida. He said 16-17 companies have announced the addition of about 200 jobs each. Most are companies in the area, with only four new to the market. He said the “old normal” consisted of half of the new jobs created from outside companies. In that vein, “we’re hoping for an announcement soon that Embraer will build here.”
Zimmermann: With a focus on the retail market, Zimmermann said he was mixed on the long-term view and expected “short-term malaise.” Investors “hate uncertainty,” he said, although his group is “pretty comfortable interest rates are going to stay low.”
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Investment prospects: Metro areas with less than 2 million population
The Urban Land Institute released its Emerging Trends in Real Estate 2012 report. Among its many surveys, it ranked areas for their prospects for investment, development and homebuilding. The scale ranges from 1 at the lowest to 9 at the highest. Jacksonville came in at No. 11.
| Rank | Area | Prospect rank |
| 1. | Austin, Texas | 6.92 |
| 2. | Raleigh/Durham, N.C. | 5.96 |
| 3. | Charlotte, N.C. | 5.58 |
| 4. | Honolulu/Hawaii | 5.47 |
| 5. | Nashville, Tenn. | 5.32 |
| 6. | Salt Lake City, Utah | 5.17 |
| 7. | Virginia Beach/Norfolk, Va. | 4.93 |
| 8. | Indianapolis, Ind. | 4.76 |
| 9. | Oklahoma City, Okla. | 4.61 |
| 10. | New Orleans, La. | 4.54 |
| 11. | Jacksonville | 4.48 |
| 12. | Albuquerque, N.M. | 4.43 |
| 13. | Milwaukee, Wis. | 4.33 |
| 14. | Memphis, Tenn. | 4.22 |
| 15. | Tucson, Ariz. | 4.21 |
| 16. | Providence, R.I. | 4.20 |
| 17. | Columbus, Ohio | 4.03 |
| 18. | Las Vegas, Nev. | 3.91 |